Bankers Address New Regulations
Profits and government rules was the focus of the bankers meeting at the Mortgage Bankers Association’s annual conference in Atlanta.

The gap between what Fannie Mae or Freddie Mac is paying to guarantee loans and what lenders are charging borrowers is about 1 percentage point, up from an average of 0.45 percent during the last decade. Bankers say profit per loan doesn’t overcome issues of volume because so many consumers can’t qualify for either new loans or refinances. Bankers also bemoaned the bevy of new federal regulations.

“The industry can’t absorb change after change after change,” said Wil Armstrong, chairman of Cherry Creek Mortgage Co.

Lenders at the conference also were discussing private securitization. Currently, the government guarantees 95 percent of all mortgages, but lenders see pent-up demand for mortgages that don’t fit into government-backed programs and predict Wall Street will respond with new options.

Source: Bloomberg, Jody Shenn (10/25/2010)